Who pays the sales tax?

I posed this question/topic at another florist forum and this is the question and the responses.

----------------------------------------------------------------------------------------------------------------
For those of you who are NOT members of a wire service or prefer to send and/ or recieve orders bypassing a wire service.....WHO PAYS THE SALES TAX?

Is it the customer placing the initial order?
Is it the sending florist contacting the filling florist?
Is it the filling florist deducting sales tax from the order?

Do customers get taxed TWICE?

Does sales tax get charged? Is it considered a tax-exempt sale?

WHO GETS CHARGED FOR PAYING THE TAXES?
-------------------------------------------------------------------------------------------------------
Sales tax is always collected at the ORIGINAL POINT OF SALE by the florist and from their customer

In turn, the filling florist treats the subcontracted incoming order as a RESALE and assuch, it is NON-SALES TAXABLE.

This applies to both Intra-State and Inter-State Flowers by Wire Sales, albeit and OLD and OUTDATED terminology for the process. Should now read Flowers By Florists Sales.

Sending florists bypassing the traditional wire services can always supply the filling florists with their state's resale number, or even their state's resale sales tax form when the filling florist feels a need for it to validate their accounting protocol.

In the few cases when we've had that request, we email the filling florist our resale number or resale certificate. No big deal.
-------------------------------------------------------------------------------
Having said that, any professional business person to include wee florists, who knows their state's sales tax guidelines regarding non sales taxable sales guidelines or sales taxed at their points of sale and subsequently subcontracted to another vendor, has nothing to fear, other than FEAR ITSELF! (I borrowed that)

OUTGOING is SALES TAXABLE at the point of sale, and ONLY ONCE!

INCOMING is SALES TAX EXEMPT because it is a RESALE ORDER and can only be sales taxed ONCE!

And this applies to wire service orders and non wire sevice orders alike according to the source of this information

--------------------------------------------------------------------------------------

Regarding orders sent and/ or recieved from Canada into the US or US to Canada, I do not know how that is handled. The above information is intra-state and inter-state only.
 
I too am wire service free and have been for 2 or 3 years now. You are right that sales tax should be charged by the sending florist. The receiving florist should treat it as a resale and not charge sales tax. There are various reasons why filling florists charge sales tax. Some want to punish us for being wire service free ( I don't know why when they get more on the order and get paid right away as we use a credit card. Sometimes they can't be bothered with keeping track of non sales tax items. Sometimes you get a new clerk who doesn't know what to do. We always supply the sales tax permit number for our store when required or can fax it when they are required to keep a hard copy on hand. Sometimes its just a new florist who doesn't know how to treat the order. I still find most florists are very appreciative of our incoming orders as they are not undervalued and get paid right away. When push comes to shove all you can do is tell them they only have the stated amount to work with even if they charge sales tax.
 
  • Like
Reactions: valleygirl1 and nanvireega
I think the main problem is that some shops don't understand the concept... You have no idea how many shops call orders in direct with their CC and are STUNNED that we are giving them a 20% discount!?!?

This should not be this difficult as it is the bais of our business; and while some states may have more confusing tax laws, in general faxing a certificate is a small inconvenience to be able to get a whole 80% of an order!!!

All you have to do is log the information in once and you're done.

In our case, we keep a file of all the certificates that are sent to us via fax... but in the meantime we don't sweat it. We mark the florists' account number in our system as non-taxable with an automatic 20% discount. If I ever get audited <shudder> I can print a list of all the Florist accounts I have in my system and request any missing certificates.

Whenever a new florist calls, the girls write the entire order down first, then enter the florist in as a new customer and then enter the order... from there on out it's a piece of cake!
 
the "best" way to "beat" the taxman, is to give EVERYONE that 20% discount, and No John, I'm not off base......the tax officers, in Newfoundland, where the HST has been in place for some time,are actually unaware of the "transfer" of perishable product rules, as currently exists in non-HST provinces.
As it stands, IF you're a member of a wire service, the GST "passes thru" the transaction, between the sending shop, and the filling shop, and NO order is exempt from the output/input tax credit, in Quebec, the PROVINCIAL sales tax is collected AND submitted on EVERY sale, but, the GST portion still remains an input/output tax flow thru, and IF you fill, you claim an "input credit".
A shop in BC, that sends an order DIRECT to a shop in Ontario (currently) MUST provide a sales tax exemption # with either EVERY order, or maintain that record with any particular shop that they do MORE than occasional business with, and HERE'S the "kicker" EVERYONE pays for incoming tax if a fruit basket is concerned, there are NO exemptions, even though it's an edible product.
IF that same shop provides US, with a PST #, we are NOT obliged to collect,and submit the PST portion, BUT, ARE required to deduct the GST as an pass thru debit/credit.
And IF that same shop in BC, sends a shop in ONTARIO that VERY SAME ORDER, WITHOUT a sales tax exemption #, the ENTIRE order is subject to tax, regardless, BOTH GST and PST, so, in effect, BC tax gets money, and ONTARIO tax gets money.
On July 1st, ALL transaction IN and OUT are subject to HST, and for THOSE shops that are IN HST provinces, EVERYTHING becomes a "flow thru" tax, so, in effect, even SUPPLIERS will be raising prices to compensate for the 8% increase in tax liabilty, which until now, were "devoid" of the PST, because they wholesaled directly to the retail market, and had NO PST liability, at all!
The MOST "successful" HST implementations, were those provinces that "combined" the taxes into the HST AND "lowered" the overall rate of taxation, to compensate for the "smaller" burden of tax preparation, and submission, HOWEVER, no such reduction appears on the horizon for Ontario, PLUS, Ontario retailers LOSE the 5% administrative payment they GET, for administering the PST on behalf of the province, so, it's a TRIPLE whammy to Ontario retailers...the "true" cost to Ontario retailers WILL BE THE HIGHEST in Canada...5%GST, 8%PST, and 5% (loss of adminstrative) credits...get this...18 freakin percent!!
Sorry John......I completely "understand"......
 
holland1 said:
I am not familiar with the different sales tax regimes that apply between states in the US so I can't say whether the same situation as I have described for Canada applies there. I'd be interested in learning more about this from other participants in this thread. From what i have seen so far in this thread, I can only imagine what a nightmare it must be to have to obtain a valid vendor tax number from every out-of-state or out-of province florist who sends orders to be filled.

John Frecker
Holland Nurseries
St. John's NL
www.newfoundlandflorist.com
Click to expand...

IF you're member of an officially recognized wire service, the wire service bears the responsibility of transferring the tax liability/credit amongst sending and filling shops, and THAT TO, remains in effect, when shops for the US send to Canada, and verse vicea.
Once the US moves into the VAT/HST system, the same rules will apply, as here in Canada, and many parts of the world, and ALL prices WILL RISE accordingly.
John, to test your "theory" try going to Italy, or Austria, or Scotland, or anywhere in between, and find out what "basic necessities" are taxed at, and why Europeans, are at the forefront of the energy revolution...they've reached that magical point where it's actually "cheaper" to lay out 4o thousand dollars for a solar/wind powers supply system, than it is to "rely" on the intergrid connection!!...They've coped, so will we....
 
Ok Mikey - How does your Canadian system work from the consumer POV. I assume he or she pays taxes when the sale/order is made. How much is that and how much remains with the sending shop and how much goes to the recieving/filling shop?

DO you, the sending florist lose money when you send under this quite confusing taxation?

As Thoreau said "Simplify Simplify" - So, I come into your store, place my order with you for 100.00 plus delivery and applicable taxes ( Nice round number ). How much more am I paying in addition to the 100.00 ( for example sake, let's say a 10.00 delivery - 110.00 total plus applicable taxes ) - After I pay you the amount....Whatever that may be.........take me through the next steps till the order reaches its destination.

Perhaps that will make your system a little clearer.
 
RWK said:
Ok Mikey - How does your Canadian system work from the consumer POV. I assume he or she pays taxes when the sale/order is made. How much is that and how much remains with the sending shop and how much goes to the recieving/filling shop?

DO you, the sending florist lose money when you send under this quite confusing taxation?

As Thoreau said "Simplify Simplify" - So, I come into your store, place my order with you for 100.00 plus delivery and applicable taxes ( Nice round number ). How much more am I paying in addition to the 100.00 ( for example sake, let's say a 10.00 delivery - 110.00 total plus applicable taxes ) - After I pay you the amount....Whatever that may be.........take me through the next steps till the order reaches its destination.

Perhaps that will make your system a little clearer.
Click to expand...

What's "supposed" to happen, is that the entire tax system will lay at the feet of "purchasing goods" and income taxes are supposed to dramatically fall, to "compensate" for the difference.
We already "know" that this "system" is NOT revenue neutral, and as reported TODAY, each and every taxpayer in Ontario WILL BE poorer, the moment HST kicks in to the tune of $265.00, per person,as a start.
Also, to "placate" angry taxpayers, the Ontario Treasury is "supposed" to offset the initial shock of the HST by "paying" each taxpayer, a total of $1000.00 over 3 or 4 installments, but, REMEMBER, it's OUR MONEY, that this government is blackballing us with, and it's unclear, as to whether the "windfall" it's to be "taxable" at your current tax rate, so AGAIN, double taxation!!
here's another shotgun approach...our provincial government introduced a stimulus package, whereby, any and ALL improvements to your home or cottage (primary residence) would be "tax returnable" at the end of the year, up to $10,000.00 in expenditures, to "kick start" the economy, however,wait until taxpayers file THIS years tax return, and find out that the $1350.00 in "tax savings" is ADDED to your taxable income, and taxed accordingly. based on your current tax rate
Our premier is a liar, is a thief, and makes NO bones about it, and when he HAS to "face the music" he lays low, to avoid the shots being fired, and ONLY emerges, when there is "good news" to report.
At my first opportunity, I'm moving our family OUT of Ontario, it's about to be something that Ontario's population can't seem to grasp!!
 
  • Like
Reactions: emilymoonflower
Mikey the Flower Guy said:
What's "supposed" to happen, is that the entire tax system will lay at the feet of "purchasing goods" and income taxes are supposed to dramatically fall, to "compensate" for the difference.
We already "know" that this "system" is NOT revenue neutral, and as reported TODAY, each and every taxpayer in Ontario WILL BE poorer, the moment HST kicks in to the tune of $265.00, per person,as a start.
Also, to "placate" angry taxpayers, the Ontario Treasury is "supposed" to offset the initial shock of the HST by "paying" each taxpayer, a total of $1000.00 over 3 or 4 installments, but, REMEMBER, it's OUR MONEY, that this government is blackballing us with, and it's unclear, as to whether the "windfall" it's to be "taxable" at your current tax rate, so AGAIN, double taxation!!
here's another shotgun approach...our provincial government introduced a stimulus package, whereby, any and ALL improvements to your home or cottage (primary residence) would be "tax returnable" at the end of the year, up to $10,000.00 in expenditures, to "kick start" the economy, however,wait until taxpayers file THIS years tax return, and find out that the $1350.00 in "tax savings" is ADDED to your taxable income, and taxed accordingly. based on your current tax rate
Our premier is a liar, is a thief, and makes NO bones about it, and when he HAS to "face the music" he lays low, to avoid the shots being fired, and ONLY emerges, when there is "good news" to report.
At my first opportunity, I'm moving our family OUT of Ontario, it's about to be something that Ontario's population can't seem to grasp!!
Click to expand...

Ok......We understand how crappy your government is regarding this stuff, but the above response tells me nothing in light of what I asked.

I come into your store.......want to spend 100.00 dollars on flowers plus applicable taxes and delivery and have it delivered to Victoria (V) for example.

Take us through the process - Who pays what taxes and when?
 
RWK said:
Ok......We understand how crappy your government is regarding this stuff, but the above response tells me nothing in light of what I asked.

I come into your store.......want to spend 100.00 dollars on flowers plus applicable taxes and delivery and have it delivered to Victoria (V) for example.

Take us through the process - Who pays what taxes and when?
Click to expand...

V is in Ontario, and Mikey is in Ontario, the sender wants to spend $100.00 worth of cut flowers to be delivered by V in Ontario, so, Mikey collects, $100.00 for the cut flowers, collects $9.95 delivery, charges PST of 8% for $8.80 and 5% GST of the total for $5.50 cents, for a grand total of $124.25.
Mikey is "responsible" for collecting and submitting $8.80 PST, and is responsible for collecting and adding to the wire service, an "output" tax credit that flows thru to V, who's clearinghouse statement "charges back" a 5% input tax credit against the value of the order, in effect, reducing it's monetary value to $100.00,plus $9.95 delivery, less $5.50 GST, less 20% commission after GST of (-$20.90), gives $83.55, less clearinghouse of 7%, for V to fill the order with, and claim BACK 5% GST input credit at her reporting period which "could" be anywhere from monthly, to yearly, in effect, "financing" the value of the tax credit, for free, on behalf of our governments, for whatever period.
 
That is CRAZY Mikey. It does indeed seem like in Canada, If I were the customer, I would be taxed twice for spending the money.
 
I'm not saying that it's right or it's good, Ricky, but taxes happen everywhere including the USA. As convoluted as it seems, the taxes are only applied once in the above example. I just wish that the govermental bean-counters would streamline their systems.
 
Gracie said:
I'm not saying that it's right or it's good, Ricky, but taxes happen everywhere including the USA. As convoluted as it seems, the taxes are only applied once in the above example. I just wish that the govermental bean-counters would streamline their systems.
Click to expand...

Gracie, something you MUST "consider"......the GST MUST be paid, BUT, let's say, the sending shop is an OG with no assets, and charges taxes, and then goes under, or takes flight, YOU, as the filling florist is required to cover the costs...were you aware of that??
The "advantage" of our system, is that that the values are so small, and the transactions so complex, CCRA, would spend good money after bad chasing it, BUT, BOTH ENDS are liable, PLUS, even a corporation DOES NOT protect it's shareholder(s)/owners from tax liability, so, if 10 years down the line, your corporation is audited, and you don't even have ownership of any shares any more, they STILL have the authority to come AFTER YOU, PERSONALLY!
 
You must log in or register to reply here.
Top Bottom
Back